Impact on the Mortgage Portfolio
By June 30, 2025 Builders Capital’s mortgage portfolio reached $50.2 million, up from $31.3 million a year earlier. This substantial increase reflects the successful capital raised through the Participating Bond Offering together with other funding initiatives and higher portfolio turnover.
How the Offering Supported Growth
The Participating Bond Offering provided additional liquidity that was invested directly into short-term construction mortgages. The new bond capital allowed Builders Capital to:
- Increase the number and size of mortgage advances to builders.
- Improve portfolio turnover — enabling more lender fee revenue and interest income.
- Maintain a conservative underwriting approach while expanding market share in attractive regions.
“The bond offering has given Builders Capital strategic flexibility to capitalize on elevated demand for short-term construction financing while maintaining a conservative capital structure.”
Bond Terms and Financial Effects
The company closed a second tranche of bonds on January 28, 2025. Newly issued bonds from that tranche carry a maturity date of January 28, 2030. Bond interest expense is paid pro rata to bondholders and is included in the company’s distributable income allocation.
For the period ended June 30, 2025, bond interest expense contributed to the company’s financial presentation. Total bond interest expense for the quarter and for the six-month period were $434,000 and $780,000, respectively.
What This Means for Investors
The Participating Bond Offering:
- Supports increased lending capacity while preserving Builders Capital’s conservative lending standards.
- Helps generate higher interest and lender-fee revenue through elevated portfolio activity.
- Allocates returns and losses on a pro-rata basis between bondholders and shareholders, improving transparency of net returns to shareholders.
As a result of the offering and the expanded portfolio, Builders Capital reported record quarterly revenue in Q2 2025 and continued to meet its dividend commitments to Class A shareholders.
Learn More
For the full Management’s Discussion & Analysis and detailed financial statements, please refer to the company’s Q2 2025 MD&A and financial disclosures.
